Mounting costs and global uncertainty dominate as hoteliers convene today for the Irish Hotels Federation’s 88th Annual Conference.
Mounting business costs and global uncertainty are the primary concerns facing hoteliers as they gather today for the Irish Hotels Federation’s (IHF) 88th Annual Conference taking place this year in the Gleneagle, Killarney.
Recent industry research carried out by the IHF reveals that 92% of hoteliers are worried about the global economy and the potential impact of political uncertainty in key markets. Closer to home, 76% are concerned about the outlook for the Irish economy over the next twelve months, as consumer finances remain under pressure and international developments pose potential risks.
Despite these challenges, however, the sector maintains a cautiously optimistic outlook. A slim majority (51%) of hoteliers report a positive outlook for trading conditions over the next 12 months, while 36% report a neutral outlook and 13% are negative.
Cautious Optimism Amid Strong 2025 Performance
This follows a robust performance by the Irish hotels sector in 2025, with average national hotel room occupancy standing at 76% for the year as a whole, up 1% on the previous year. While most regions saw an increase in occupancy levels, significant regional disparity persists, ranging from 70% occupancy in the border region to 83% in Dublin.
Commenting on the outlook for the sector, IHF President Michael Magner said:
“We are cautiously optimistic for the coming year, as forward bookings suggest business levels will remain stable in 2026. This is despite significant headwinds, chief among them relentless increases in the cost of doing business, which is already exceptionally high by international standards. This requires a renewed, national focus on cost competitiveness – both within our own tourism industry and across the wider economy. Thankfully, the Government’s decision to restore the 9% rate of VAT on hospitality food services from July will partially offset these increases for food-led businesses operating on some of the tightest margins of any sector.”
Mr Magner notes that continued investment in product development remains a priority for Irish hotels.
“A focus on value-enhancing investment is essential for the future growth of our sector and tourism industry. Hotels are examining all aspects of their operations to elevate their product, meet changing visitor preferences and achieve their sustainability goals. This ensures Irish tourism is positioned to deliver long-term growth as Ireland’s largest indigenous industry, supporting over 270,000 livelihoods.”
Hotels Double Down on Refurbishment and Environmental Sustainability
Refurbishment – Following a period of already significant capital investment in their properties during the last four years, 75% of hoteliers plan to further increase investment over the next 12 months. Key areas of planned investment include projects involving guest bedroom refurbishment (61% of hotels) and upgrades to restaurants, bars and common areas (47% of hotels).
Environmental sustainability – Some 53% of hotels indicate they plan to increase investment in sustainability in 2026, while an additional 32% indicate they are actively exploring new options to enhance sustainability. Among those investing, key targets include renewable energy and energy efficiency solutions (60% of hotels), food waste reduction (33%) and water conservation measures (26%).
Picture: Don MacMonagle
